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Amazon Whole Foods Transcript

The story of Amazon buying Whole Foods sounds like it could come straight out of the Billions tv show.

April 10, 2017 – John Mackey, CEO of Whole Foods, gets off a plane at JFK to see his phone explode.  Jana Partners, a hedge fund, has just purchased 9% of Whole Foods’ stock.  Now this hedge fund own the 2nd largest percentage of Whole Foods and is publicly putting on the pressure for a sale or major business overhaul. (Source.)

June 16, 2017 – The announcement is made: Amazon is buying Whole Foods.

Two months and 6 days!  That’s some fast action.  Amazon considered a bid in 2016 and there probably is more to the story but it still seems fast to me.

My biggest takeaway from this story isn’t about the rise and potential fall of conscious capitalism (although that would be a interesting way to go and maybe that’s a future post).

My biggest takeaway has to do with something more timeless: the ability of the big guys (the 1%, the large multi-national corporations, the hedge funds, etc.) to dictate whatever they want to happen.  That’s why I say this story could’ve come from Billions.  In the show, Bobby Axelrod, Chuck Rhodes, and their friends run the world and everyone else are puppets.  In real life, Barry Rosenstein (the man behind Jana Partners and on record for buying the most expensive house in America), Amazon, and their friends run the world.

If you’ve been a loyal fan and shopper of Whole Foods, what are you to do now?  Can you still believe in the mission?  Will that mission still take precedence?  You have no control.

I consider myself an entrepreneur who is building a business for a higher mission than just making money.  In fact, I chose a business structure called L3C (low-profit, limited liability company) and my Articles of Incorporation state our mission and that we are organized for that mission prior to making a profit.  Our mission has been a huge asset for us with all our stakeholders – customers, employees, vendors, our landlord, and so forth.

There are 3 lessons I’m learning from the Amazon Whole Foods story:

Lesson 1: Think carefully before becoming publicly traded or selling equity. 

Personally, I’m okay with having a business that stays relatively small.  I don’t want to be the next chain coffee shop.  I have a lot greater control over the accomplishment of my mission when it’s just my husband and I who are the owners.

Etsy is another example of what can happen to a company on a mission when they become publicly traded.  Toms is a good example of a mission-oriented company that is now 50% owned by Bain Capital an investment firm.  I encourage you to research these and other stories before giving up control of your own mission-driven business.

You might think my mission won’t grow as far as it would if I expand.  Here are a couple examples that prove my point…

Lesson 2: The direct trade elements of my mission are becoming more and more important. 

I haven’t seen it talked about in any news stories but I wonder about the impact of farmers markets on Whole Food’s sales.  Why do you need an organic, locally-sourced grocery store when you can buy straight from the farmer during your lunch break or on a beautiful Saturday morning?

I know one of my competitive advantages, compared to chain coffee shops, is direct partnerships and deep relationships.  My vision is of a world where consumers are connected with farmers as much and as close as possible.  That vision seems even more important now.

Lesson 3: Us business activists have got to band together. 

When times get tough, like during a recession or depression, those who are smart band together.  For the wealthy, this often looks like mergers and acquisitions.  For us business activist entrepreneurs, this can look like collaborations and partnerships.  No matter what the type or size of their businesses, communities of entrepreneurs succeed together.

Which leads me to a community we’d love to invite you to join.  We’re gathering people who consider themselves business activist entrepreneurs or who want to be one in a Facebook group.  It’s meant to be like a never ending dinner party where we can share and discuss endlessly.  Hopefully some great collaborations and partnerships will develop from within the group members.  To request access, click here.

In Conclusion

No matter what happens from here and how all this shakes out – whether Amazon sells more groceries or Whole Foods gets more automated or the entire deal is blocked under anti trust law – remember this one thing:

As an entrepreneur, you have the power to make the world a better place.  That power is amplified by the people with whom you surround yourself. 

Take 1 small step and join a community of like-minded entrepreneurs right now.

I’ll see you in the group and again here next week.  Keep overflowing!